Don’t compare Malaysia’s growth to Thailand, Indonesia, say economists

Malaysia recorded the world’s third-best economic growth performance last year.

PETALING JAYA: It is unfair to compare Malaysia’s growth with that of neighbouring countries because each nation has distinct economic and political structures, say economists.

Bank Muamalat Malaysia’s Afzanizam Abdul Rashid said that any direct or literal comparisons should be carried out cautiously to avoid conveying inaccurate signals.

“Every country has unique issues, whether in terms of history, political influences, or economic structures.

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“If political instability occurs, it has repercussions on policy implementation, as consistent efforts in economic reform require stability and clarity in formulation and execution,” he told FMT.

Afzanizam was responding to comments by Perak PAS commissioner Razman Zakaria who cited Thailand as an example when claiming that political instability had no impact on a country’s gross domestic product (GDP).

Razman compared Malaysia’s GDP recorded in the last quarter of 2022 and the second quarter of 2023 to those of Indonesia and Thailand.

Thailand’s GDP rose by 1% in the fourth quarter of 2022 before increasing by 2% and 3% in the first and second quarter of 2023, respectively.

Thai lawmakers had last week approved tycoon Srettha Thavisin as the kingdom’s new prime minister, ending three months of political deadlock on the day former premier Thaksin Shinawatra returned from exile.

Malaysia, meanwhile, posted a GDP growth of 7% in the fourth quarter of last year, before the percentage dipped to 5.6% and 2.9% in the first and second quarter of 2023, respectively.

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Universiti Tun Abdul Razak’s Barjoyai Bardai said comparisons should not be done on a quarterly basis, adding that Malaysia recorded the world’s third-best economic growth performance last year.

He added that Thailand and Indonesia’s economies had been rapidly growing in the past three years, thanks to their improved economic and social environment. He said for example, Indonesia aimed to become the world’s fourth-largest economy by 2030.

“Indonesia has successfully elevated households from low-income to middle-income, meaning that they have managed to enhance household and overall national income. The same goes for Thailand, with its population of 90 million,” he said.

This differs from countries like Malaysia, with its population of only 33 million people. “We will face (economic) challenges in the future due to our smaller population,” he said.

Barjoyai also said that Malaysia’s public sector should be separated from the country’s political system so that any policies or plans that were already in place won’t be disrupted in the event of a change in government. - FMT